Mushrooms of Legal Moneylenders popping up and cover 70% of the classified pages in Newpaper. Offering free interest and interest as low as 10%...
Here is the catch... As interest rate is low is when you are able to return the money within a period of time such as 1 or 2 months. Free interest if you can return in a week.
The Real catch... Where does their earning goes then? It is in the approval fee which is acceptance fee+admin which can be as high as 15% of your loan. add the 10% and and you are actually paying 25% interest for the loan.
What can you say about that?
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How to prevent it? Today, I see newpaper and found many adv.
ReplyDeletehttp://politics.sgforums.com/forums/10/topics/400688
I truly like to reading your post. Thank you so much for taking the time to share such a nice information. I'll definitely add this great post in my article section.
ReplyDeleteReverse Mortgage Calculator
No problem. And thanks for the visit.. Hoping to go more in depth in their business too.
ReplyDeleteCheck out with the gahmen why they tax 17% on whatever loan out amount be it recovered or not recovered. Think before you open your mouth. Do your homework before you pass a judgement on these people are loan shark. Willing buyer willing seller. So infact the main bulk of the payment goes to our gahmen. 1st world gahmen, can whack illegal loansharks at the sametime make money.
ReplyDeleteGahmen? You meant government I suppose. Why so afraid to spell it correctly? Okay, let me touch on the 17% tax. This is called the corporate income tax. This is taxed for PROFIT NOT on the principle loan! Thank for contributing tax to Singapore. So because the tax is 17% and so you have to charge more than $200 interest per month per 1k loan so that the governement can earn $34? Wow! So what happen to pawn shop.. Even for item that failed to retrieve by the customer, they have to put on audition and any extra, they will return to the customer. So if all your customers return the money, are you going to pay them back the excess? By the way, the 17% corporate income tax not only apply to moneylenders but to most of the corporate business in Singapore. Yes.. Willing buyer willing seller, same to you. Main bulk is 17% so where the 83% goes? Charity? Haha.
ReplyDeletelogically people who came to moneylender are those had very bad credit and so on....
ReplyDeleteFor instance some banks charge higher interest for mortgage loan and car loan cos the bank willing to take a higher risk on those people who credit which is not so perfect. Tenancy of default on the loan are very high.
For instance the moneylender earn $250 Profit per borrower as you mention. This borrower took the money and went missing so the moneylender lost $1000.
In order to recover back the $1000, the moneylender need to find another 4 borrowers to earn back their $1000 only not mention about profit. What happen if out of 4 borrowers another one went missing? get another 4 to cover?
This type of business you want to do?
Any person who wanted to do this business take a higher risk in losing their money so logically high risk high gain. Think about it?
By the way it is 50% now... I don't understand why he claim that this business is risky...why show the pessimistic side? Why alway claim ppl can borrow and don't return? What if all the people return? How much is the profit?
ReplyDeleteWhat is the percentage of the defaulters? Bank do borrow a in fact 10x and charge just 7,5% a year the most up to 5 years. This 5year anything can happen to the borrow.. Accident and death and they get nothing back. Isn't it more risky? Yes the bank have more fund but think about it again. They earn $75 per $1k. They must find at least 14 people and wait for 1 year before they get back their $1k. Whereas you can do it with 2 ppl in a month and even less than them that for weekly repayment. Which is more risky? If out of 14 ppl went missing? Another 14 ppl for 1 year again? Haha... It surface isn't it?